This Week in Telecom Innovation: Google’s Project ARA – Success or Failure?

Author: Sumit Mittal, Sr. Manager Corporate Business Development and Venturing, Deutsche Telekom

The $50 modular phone from Google under the banner project Ara is coming – Threat for some, opportunity for others.

Google recently showcased the actual phone for the project Ara – Ara is designed to offer consumers choice (when it comes to Hardware), with an open platform design that provides a basic chassis from Google with the option to customize functionality using modular components sourced from third-party hardware developers. Users could buy sensors, additional storage, more battery capacity, better speakers and so on, slotting in-and-out components as needed.

The project offers lots of challenges and questions have been raised for its success. I will list few of the challenges that I have heard (and try to address them):

Incompatible device drivers:

People at a Telecom Council event talked about incompatible device drivers being a big issue and how in the past Motorola project and a project on Kickstarter (trying to solve similar problem) failed. I believe Google can address this issue through the Machine Development Kit (MDK) that they intent to release. Essentially like SDKs for Android Apps, MDKs will lay the groundwork for hardware modules. Developers who use the MDK to program the hardware module should be compatible, and the MDK should take care of the device driver issue – maybe not 100%, but it will reduce the number of problems significantly.

Buying the modules:

I see this as a big issue as well. With apps, I can buy an app from a store and instantly use it (instant gratification comes to mind) but with physical modules it would be different. Google could operate a  storefront, where developers could sell tested hardware modules (easy for independent developers with 3D printing) – but then the whole retail logistics come into place, along with returns, and what have you. And Google hasn’t proven strong in this category (think original Nexus).

OEM buy in:

Big vendors such as Samsung and other will hate Ara. Primarily as it could drive down the hardware cost for phones and will eat into their margins. Independent developers will then be able to sell directly to the consumers and OEMs will have even more fierce competition. Modular competitors will mean OEMs will have to innovate even more quickly, and bring their prices down too, but overall the OEM market can take a big hit

I welcome comments from readers – I’d love to hear from anyone about other challenges/concerns that I might have missed.

As far as the benefits go, the consumer is in for a hardware buffet overload. The Smartphone pricing will face downward pressure and consumers can enjoy more variety with their phones. There is also the potential that the life of Smartphone (today 18 months or so) will increase. People will  just swap modules instead of buying entirely new phones. For the operators, they won’t have to endure as many inventory write-offs for subsidized devices (Maybe now subsidized modules :)). If Project Ara is a success, expect OEMs to drop their handset pricing to compete – additionally, leading brands may come up with their own non-compatible modular phones in order to respond to the threat…while still not supporting the new ecosystem. Trailing brands may compete with MDK-compatible modular phones and individual modules.

The ability to produce modular devices will also yield one positive outcome. So often phone features are not built-in, because they are considered too leading-edge, or too niche. So we see things like the Jawbone noise cancellation first appear in modular Bluetooth add-ons, then later be integrated in phones. With phone modularity, a wider range of features (and other bells and whistles) could be more readily available for phones, and sooner.

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